Why is terrorism so frightening? After all, if you just look at the numbers, being blown-up on an airplane is far less likely than dying in a car crash on the way to the grocery store [pdf].

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Why does the possibility of hooded fundamentalists give us national nightmares? Why arWe we so petrified of a few dozen Islamic lunatics?

A big part of the answer, I think, lies in a paper published in Science in December 2005 by Colin Camerer, a neuroeconomist at Cal-Tech. His experiment revolved around a decision making game known as the Ellsberg paradox. The game itself is simple. A player is asked to decide between two different gambles, each represented by a deck of twenty cards. One deck is composed of 10 red and 10 black cards, while another deck has 20 cards with an unknown mixture of red and black (this is known as the "ambiguous" deck). Players are asked to bet on one of the decks and choose a color. If the chosen color is drawn, the player wins $10.

Classical economics assumes that people will bet equally on the two different decks. Since we have no idea what mixture of cards the "ambiguous" deck contains, we should just assume that it's split fifty-fifty. Of course, this isn't what happens; people are naturally scared of what they don't know. When Camerer played this game with experimental subjects, they almost always chose the known gamble over the unknown gamble. Furthermore, Camerer could see why players were so averse to the unknown. By monitoring their brains using fMRI, he could detect the specific regions activated by the two different decks of cards.

Camerer discovered that, contrary to the predictions of classical economics, gambles in which the stakes were unknown lead to increased activity in the amygdala and orbitofrontal cortex, both of which are involved in the production of fear. To see whether this fear was responsible for their avoidance of the unknown gambles, Camerer also tested patients with lesioned orbitofrontal cortices. (These patients are unable to generate and detect emotions.) Sure enough, because these patients couldn't feel fear, they showed no bias for either deck of cards. Because of their debilitating brain injury, they behaved perfectly rationally.